China’s May factory activity grew at fastest pace in eight months

HONG KONG: Activity in China's factories expanded at its fastest pace for eight months this month, official data showed yesterday, as demand at home and overseas improved.

The Purchasing Managers' Index came in at 51.9, up from 51.4 last month, China's National Bureau of Statistics (NBS) said, in line with a Bloomberg News survey. The reading was well above the 50-point mark that separates expansion from contraction.

NBS analyst Zhao Qinghe said in a statement that high-tech manufacturing and improved export orders both contributed to the growth.

The May reading marks the fastest rate of expansion since last September despite US President Donald Trump's threats to impose tariffs on China.

The rise in new export orders "is perhaps due to front-loading by importers in fear of a possible trade war", Nomura's chief China economist Lu Ting said.

Capital Economics China economist Julian Evans-Pritchard warned that the growth may not be sustainable, and that "it appears to mostly reflect a temporary boost to industrial output from the easing of pollution controls rather than a turnaround in underlying demand".

China curbed activity in heavy industries in the north-east during winter months in an effort to reduce surplus capacity and lessen the heavy smog. - AFP